Trump wants the Fed to lower interest rates after the wipeout of the stock market, but the story is not on his side

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After the latest stock market crash, President Donald Trump said on Tuesday that he wants the Fed to lower interest rates. But that can be wishful thinking.

The United States is on the brink of annual growth of 3% in 2018 for the first time in 13 years and the unemployment rate has fallen to 3.7%, the lowest level in 48 years. The Fed lowered rates a few times when gross domestic product seemed strong, albeit briefly, but almost never when growth was stable and unemployment low.

There is no example of what the Fed has done since the end of the Second World War.

Shortly before flying to Florida for Thanksgiving, the president told reporters that the Fed was a bit to blame when asked about the stock market crash and general health of the economy. He has been criticizing the Fed for months because of his policy of gradually raising US interest rates.

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"I'd like to see the Fed with a lower interest rate. I think the rate is too high. I think the Fed's problem is much worse than anyone's, "said Trump.

The central bank raised three times this year a key short-term interest rate, known as fed funds, a fourth increase being scheduled for next month. The Fed wants to make sure that the strength of the US economy and the tight labor market do not cause prices and wages to rise as quickly as it triggers an episode of detrimental inflation.

US interest rates, however, remain extremely low by historical standards and there is little evidence that the economy is about to stumble.

The federal funds rate is now between 2% and 2.25%. On the other hand, the rate reached 5.25% during the last economic expansion from 2001 to 2007.

The economy, for its part, is expected to grow by close to 3% in the fourth quarter, after increases of 3.5% and 4.2% in the two previous quarters.

Inflation, meanwhile, seems stable. The Fed's preferred PCE price gauge increased by 2% from September 2017 to September 2018 – exactly the official target of the central bank.

The Fed could change its plans if the stock market continues to rise and the economy slows, but the central bank is unlikely to do so in the absence of evidence.